On June 5, 2019, InflaRx had announced the top-line results of their SHINE phase IIb trial of IFX-1 in Hidradenitis Suppurativa (HS). Unfortunately, the primary endpoint of the trial, a dose-dependent effect of IFX-1 on the HiSCR, a binary score for evaluating HS clinical response, was not met. Moreover, an unusually high placebo response rate was present. A more detailed analysis (published on July 18, 2019) showed, however, that high-dose treatment with IFX-1 resulted in multiple efficacy signals which were not reflected by the HiSCR. The number of draining fistulas was significantly reduced by week 16 in the high-dose group when compared to the placebo group. Further, using the International HS Severity Score System, IHS-4, which takes into account all lesions, a statistically significant reduction was seen in the high-dose group, when compared to the placebo group. The company is continuing the open label extension part of the SHINE trial as planned and will discuss the data with the regulatory authorities in an end of phase II meeting.

“While we are all disappointed about the failed primary endpoint for IFX-1 in the SHINE study in HS, our ongoing analysis and findings indicate that the high-dose IFX-1 treatment resulted in meaningful anti-inflammatory efficacy, which gives us reason for optimism as we plan the next steps,” said Prof. Niels C. Riedemann, Chief Executive Officer and Founder of InflaRx. “Based on our strong current balance sheet, dedicated team with confidence in our technology, and support from the medical communities, we are well positioned to continue development in HS and in our other indications. I look forward to reporting on our further progress in the coming months.”

Further corporate update

Richard Brudnick, CBO of Codiak BioSciences, appointed as Non-Executive Director at the annual general meeting on May 23, 2019.

In May, InflaRx started a second phase II study with IFX-1 in ANCA-associated vasculitis. The first patient has been treated in the IXchange trial. The trial is planned to enroll approximately 80 patients at about 60 sites in up to 12 European countries and Russia.

Recruitment in the U.S. phase II trial in ANCA-associated vasculitis is ongoing; it is planned to recruit approximately 36 patients at about 20 sites in the U.S.

Approval granted by Health Canada to initiate a phase IIa clinical trial evaluating IFX-1 in Pyoderma Gangraenosum, a debilitating, rare autoimmune disease marked by large, painful ulcers. This is the third inflammatory disease for which InflaRx is developing
IFX-1. The first patient was treated in June.

Q2 2019 financial highlights

Cash and cash equivalents plus securities and other investments totaled €138.3 million as of June 30, 2019, compared to €156.4 million as of December 31, 2018. Cash and cash equivalents amounted to €54.1 million as of June 30, 2019 (December 31, 2018: €55.4 million) and marketable securities were €84.2 million (December 31, 2018: €100.9 million).

Net cash usedin operating activities increased to €18.7 million in HY1 2019, compared to €11.1 million in HY1 2018, mainly due to the increase of cash expenses, such as third-party expenses for manufacturing and clinical trials for our lead program IFX-1 and personnel expenses at InflaRx.

Research and development expenses increased to €20.2 million for HY1 2019 (HY1 2018: €10.5 million). The principal drivers of the increase were CRO expenses associated with preclinical studies and clinical trials conducted for IFX-1 as well as manufacturing costs.

General and administrative expenses amounted to €6.9 million in HY1 2019, compared to €6.2 million in HY1 2018. This increase is primarily attributable to increased overall headcount and related cost.

Net financial result in HY1 2019 (€2.0 million) consisted of €1.9 million interest income and €0.2 million net exchange gain, compared to a net financial gain of €3.8 million in HY1 2018. This was mainly due to higher foreign exchange gains (€2.9 million) but lower interest income (€1.2 million).

Net loss for the first two quarters of 2019 was €25.1 million or € 0.97 per common share (basic and diluted), compared to €12.8 million or €0.51 per common share (basic and diluted) in HY1 2018.

Additional information regarding these results is included in the notes to the consolidated financial statements as of and for the quarter ended June 30, 2019, which can be found on the InflaRx website in the Investors section.

Inflarx N.V. and subsidiary

Unaudited condensed consolidated statements of comprehensive loss
for the three and six months ended June 30, 2019 and June 30, 2018

For the three months ended June 30,

For the six months ended June 30,

2019(unaudited)

2018(unaudited)

2019(unaudited)

2018(unaudited)

(in thousands of €, except for per share data)

Operating Expenses

Research and development expenses

(12,497)

(5,031)

(20,192)

(10,505)

General and administrative expenses

(3,648)

(3,161)

(6,949)

(6,158)

Total Operating Expenses

(16,145)

(8,192)

(27,141)

(16,663)

Other income

3

65

68

150

Other expenses

(79)

(21)

(83)

(33)

Operating Result

(16,221)

(8,148)

(27,157)

(16,545)

Finance income

1,339

5,742

2,498

6,007

Finance expenses

(388)

(37)

(450)

(2,226)

Net financial Result

950

5,705

2,048

3,781

Loss for the period

(15,271)

(2,443)

(25,109)

(12,764)

Share information

Weighted average number of shares outstanding

25,964

24,890

25,964

24,357

Loss per share in Euro (basic/diluted)

€ (0.59)

€ (0.10)

€ (0.97)

€ (0.52)

Loss for the period

(15,271)

(2,443)

(25,109)

(12,764)

Other comprehensive income that may be re­clas­si­fied to profit or loss in subsequent periods:

Exchange differences on translation of foreign currency

(1,622)

(17)

695

(16)

Total comprehensive loss

(16,893)

(2,460)

(24,413)

(12,780)

Inflarx N.V. and subsidiary

Condensed consolidated statements of financial position as of June 30, 2019 and December 31, 2018

2019
(unaudited)

2018

(in thousands of €)

ASSETS

Non-current Assets

Property, plant and equipment

1,643

625

Intangible assets

453

223

Non-current financial assets

290

207

Total non-current assets

2,385

1,055

Current assets

Current other assets

3,652

1,589

Current financial assets

84,818

101,184

Cash and cash equivalents

54,063

55,386

Total current assets

142,534

158,159

TOTAL ASSETS

144,919

159,214

EQUITY AND LIABILITIES

Equity

Issued Capital

3,116

3,116

Share premium

211,022

211,022

Other capital reserves

22,200

18,310

Accumulated deficit

(106,216)

(81,107)

Other components of equity

746

50

Total equity

130,867

151,391

Non-current liabilities

Lease liabilities

647

-

Provisions

42

57

Government grants

9

11

Total non-current liabilities

698

68

Current liabilities

Lease liabilities

339

-

Employee Benefits

705

788

Social securities and current other tax liabilities

126

310

Trade and other payables

12,184

6,657

Total current liabilities

13,354

7,756

Total Liabilities

14,052

7,824

TOTAL EQUITY AND LIABILITIES

144,919

159,214

Inflarx N.V. and subsidiary

Unaudited condensed consolidated statements of changes in shareholders’ equity for the three months ended June 30, 2019 and June 30, 2018

Shares out-standing

Issued capital

Share premium

Other capital reserves

Accumulated deficit

Other components of equity

Total equity

(in thousands of €, except for share data)

Balance as of January 1, 2019

25,964,379

3,116

211,022

18,310

(81,107)

50

151,391

Loss for the period

-

-

-

-

(25,109)

-

(25,109)

Exchange differences on translation of foreign currency

-

-

-

-

-

695

695

Total comprehensive loss

-

-

-

-

(25,109)

695

(24,414)

Transactions with owners of the Company

Contributions

Equity-settled share-based payment

-

-

-

3,890

-

-

3,890

Total Contributions

-

-

-

3,890

-

-

3,890

Total transactions with owners of the Company

-

-

-

3,890

-

-

3,890

Balance as of June 30, 2019*

25,964,379

3,116

211,022

22,200

(106,216)

746

130,867

Balance as of January 1, 2018

23,812,100

2,858

161,639

6,225

(51,293)

-

119,429

Loss for the period

-

-

-

-

(12,764)

-

(12,764)

Exchange differences on translation of foreign currency

-

-

-

-

-

(16)

(16)

Total comprehensive loss

-

-

-

-

(12,764)

(16)

(12,780)

Transactions with owners of the Company

Contributions

Issued shares

1,850,000

222

52,769

-

-

-

52,991

Transaction costs

-

-

(3,801)

-

-

-

(3,801)

Equity-settled share-based payment

-

-

-

5,938

-

-

5,938

Total Contributions

1,850,000

222

48,967

5,938

-

-

55,128

Total transactions with owners of the Company

1,850,000

222

48,967

5,938

-

-

55,128

Balance as of June 30, 2018*

25,662,100

3,080

210,606

12,163

(64,056)

(16)

161,776

Inflarx N.V. and subsidiary

Unaudited condensed consolidated statement of cash flows for the six months ended June 30 2019 and 2018

2019
(unaudited)

2018
(unaudited)

(in thousands of €)

Operating activities

Loss for the period

(25,109)

(12,764)

Adjustments for:

Depreciation & Amortization

308

50

Net financial result

(2,048)

(3,781)

Share based payment expense

3,890

5,938

other non-cash adjustments

(205)

(58)

Changes in:

Current other assets

(2,063)

(248)

Provisions

(15)

52

Employee benefits

(84)

173

Social securities and current other tax liabilities

(185)

(2)

Trade and other payables

5,527

(1,189)

Interest received

1,270

681

Interest paid

(15)

0

Net cash from operating activities

(18,730)

(11,148)

Investing activities

Cash outflow from the purchase of intangible assets, laboratory and office equipment

(504)

(362)

Cash outflow for the investment in non-current other financial assets

(76)

(33)

Proceeds from the disposal of non-current other financial assets

4

13

Proceeds from the disposal of current financial assets

17,709

-

Purchase of current financial assets

-

(8,014)

Net cash used in investing activities

17,133

(8,396)

Financing activities

Proceeds from issuance of share capital

-

52,991

Transaction cost from issuance of share capital

-

(3,801)

Repayment of leasing debt

(125)

-

Net cash from financing activities

(125)

49,189

Effect of exchange rate changes

399

3,142

Change in cash and cash equivalents

(1,323)

32,787

Cash and cash equivalents at beginning of period

55,386

123,282

Cash and cash equivalents at end of period

54,063

156,069

About IFX-1:

IFX-1 is a first-in-class monoclonal anti-human complement factor C5a antibody, which highly and effectively blocks the biological activity of C5a and demonstrates high selectivity towards its target in human blood. Thus, IFX-1 leaves the formation of the membrane attack complex (C5b-9) intact as an important defense mechanism, which is not the case for molecules blocking the cleavage of C5. IFX-1 has been demonstrated to control the inflammatory response driven tissue and organ damage by specifically blocking C5a as a key “amplifier” of this response in pre-clinical studies. IFX-1 is believed to be the first monoclonal anti-C5a antibody introduced into clinical development and has, to date, successfully completed three clinical phase II studies. Approximately 300 people have been treated with IFX-1 in clinical trials, and the antibody has been shown to be well tolerated. IFX-1 is currently being developed for various inflammatory indications, including Hidradenitis Suppurativa, ANCA-associated vasculitis and Pyoderma Gangraenosum.

About InflaRx N.V.:

InflaRx (Nasdaq: IFRX) is a clinical-stage biopharmaceutical company focused on applying its proprietary anti-C5a technology to discover and develop first-in-class, potent and specific inhibitors of C5a. Complement C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. InflaRx was founded in 2007 and the group has offices and subsidiaries in Jena and Munich, Germany, as well as Ann Arbor, MI and New York, NY, USA. For further information please visit www.inflarx.com.

This press release contains forward-looking statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “estimate,” “predict,” “potential” or “continue” and similar expressions. Forward-looking statements appear in a number of places throughout this release and may include statements regarding our intentions, beliefs, projections, outlook, analyses and current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for our product candidates, our intellectual property position, our ability to develop commercial functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, prospects, future transactions, growth and strategies, the industry in which we operate, the trends that may affect the industry or us and the risks uncertainties and other factors described under the heading “Risk Factors” in InflaRx’s periodic filings with the Securities and Exchange Commission. These statements speak only as of the date of this press release and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, except as required by law.